I doubt if many people take Michael Moore as seriously as he takes himself — if, indeed, he is serious in his many attacks on big business. Moore is, after all, an entertainer, and entertainers give the people what they think the people want — not necessarily honest facts. Controversy and allegations sell many more books and movies than does straight fact.

In Moore’s latest assault on our intelligence, however, his new movie “Capitalism: A Love Story”, now debuting at the Venice Film Festival, he makes some valid observations, but he draws them to a deeply flawed conclusion. In his movie, according to this Bloomberg story, Moore points to causes for and effects of our major economic problems: e.g., the Lehman Brothers failure; massive bailouts in general and specifically the “U.S. taxpayers’ $700 billion rescue of the financial system;” the Bush Administration’s general economic incompetence; dishonesty in government and dishonesty and poor management in business and industry…but the irony is, he points to these things as examples of problems created by capitalism.

Michael Moore’s conclusion (in his own words, from the movie):

Capitalism is an evil, and you cannot regulate evil; you have to eliminate it and replace it with something that’s good for all people, and that something is called democracy.

If you follow his twisted logic you will have to conclude that capitalism needs to be replaced by pure socialism (he names it “democracy” but he must know that a true democracy cannot thrive outside of a capitalist society).

The U.S. free-market economic model is one of Moore’s prime targets because that is the basis of one of the only true capitalist societies in existence, and Moore is on record, here and elsewhere, as detesting capitalism. Add to this the fact that the US free market has been corrupted by dishonesty and greed in business, in industry, and in the government, and it not only strengthens his argument that capitalism is evil, it provides a convincing debating point for people who do not want to see the fallacy in his charges. The things that Michael Moore points out as problems really are problems, but he either doesn’t understand or, most likely, refuses to admit that these abominations are as disgusting to free market advocates as they are to the critics of the free market.

While Moore’s charges may reflect reality, Moore’s named villain, capitalism, is misidentified and misidentified intentionally. Capitalism is not the villain — it is the victim. Moore may want capitalism to appear to be the villain, but the real villains are the greed and dishonesty that have been left unchecked and have driven our economy into a tail spin. Greed and dishonesty are, and always have been, the villains.

Here, as I see it, is the basic problem: Take any economic theory, at any point in history, and examine it. You’ll see that its projected success is based on an impractical assumption — the assumption that all the players respect the theory and will play honestly.

Sloppy accounting, outright lies, misuse of our tax dollars, government intervention in the marketplace, dishonest politicians, dishonest businessmen, government loans to failing businesses, and the many other things that are going on now in the Obama administration, as they went on during the Bush Administration and in previous administrations, are not examples of the effects of capitalism — they are examples of the abuse of the free market system by people who have placed themselves above the rules. This abuse has been going on so long it is considered business as usual, and it has finally reached a crisis point.

One of three things are likely to happen at this point:

Possibility 1: The Obama administration will, in effect, grant Michael Moore’s wish by putting legislation in place that will eventually guarantee that business and industry are so mired in regulation and so weighed-down by restrictions that they will all require government assistance to stay in business, and that assistance will come with such a steep price that the free market will eventually become no more than another government program.

Possibility 2: The 2010 elections will sweep so many big-government liberals out of office that possibility 1 cannot happen. At that point the government should stimulate business with a massive tax restructuring, apply intelligent controls on business that will keep everyone honest without strangling them in regulation, and end all government involvement in the free market. (This is my “pie in the sky” option — the best but also the most unlikely.)

Possibility 3: Because of Obama’s shrinking popularity, the government will be able to do nothing. On the surface, that may appear to be a satisfactory option — at least it would save us from over-regulation and the price inflation that always follows, but the status quo will do nothing to resolve the core problems of the dishonesty and greed in business and politics that got us into the current financial crisis.

16 Responses to “Michael Moore on Capitalism”

“Capitalism is an evil, and you cannot regulate evil; you have to eliminate it and replace it with something that’s good for all people, and that something is called democracy.”

-I love Moore’s films (except the one on healthcare, which included blatant lies about Cuba), but it’s upsetting he would say something so silly. Democracy is a political system and capitalism is an economic system. You cannot “replace” one with another. It’s like replacing aa hand with a foot. It simply makes no sense. I would have preferred it if he just came out honestly and said he favors socialism. Then at least I wouldn’t feel like he considers his viewers too stupid to realize that democracy and capitalism are not interchangeable.

“Take any economic theory, at any point in history, and examine it. You’ll see that its projected success is based on an impractical assumption — the assumption that all the players respect the theory and will play honestly.”

Harvey
Well said as usual.
I think that for Obama and his followers, the greatest desire is to install plan #1 which will cause so much voter backlash that he will be gone in 2012. He doesn’t like losing so be prepared for an all out assault on our human and civil rights. Such a stupid move will likely result in bloodshed and the complete destruction of the Democratic party as we know it today. Not enough people are taking this President serious or the danger he poses for our country.
Michael Moore owes more to capitalism than most of us. He has turned left wing liberalism into a multi-million dollar business. For a tubby little hippy from Flint Michigan he has done well. I have met and talked with him several times although I must admit it was years ago.

Nicely said, Clarissa. Harvey, I also agree with your statement about players respecting the rules and playing honestly.

Larry — “an all-out assault on our human and civil rights” and “bloodshed?” Whatever are you talking about? If we had elected someone like Hitler or Stalin to be president, your statements would have some merit. But they just don’t make any sense in a political system where the President has so many limitations on what he can do, even assuming that he’s the evil monster you depict. As we can all see, he’s even getting opposition and mixed levels of support from his own party in Congress.

The whole country would benefit if both sides toned down the level of apocalyptic rhetoric.

I enjoy Michael Moores films,espially ,”Bowling For Columbine”,but you must remember,he is in it for the Capitalism and the shock value,not for his virtueous truth telling.I think it’s all,well mostly,a spoof and to create interest,he is a sharp businessman.You can’t say he is boring,but I think he loves capitalism.Bloodshed,boy you are way too riled up,and I don’t think big business would ever allow any of that to happen.The rumor of such things,like gun control,will help you guys get back into power,where you can revert back to the amazing and profitable,Bushanotmics.

Tom
This man is unlike any we have ever seen in this country. He continues to appoint his so-called Czars which he has a right to do but why so many? These people don’t have to be approved by anyone but him. What do we know about them? For a person that worried last November about being transparent he sure is not living up to his promise. Has he completed filling all his cabinet positions? Yet the Czar count continues to rise. I’m sorry but I cannot see the greatness in this man that would free him of criticism or close examination. I enjoy writing about everything. I’ll not write of this president again but don’t say I didn’t try to warn you.

Those of us who see the destruction Obama wants to bring to this country’s economy — so the government can be enlarged to take up the slack — really MUST continue speaking, blogging, editorializing and otherwise harping on the subject. Obama can’t be allowed to do what he is intending to do and its our duty to open some eyes!

We get comments here and on our personal blogs but how many have read what we say? No doubt many more than have commented — maybe we’ve already opened some eyes!

Tom,

Even if you don’t see Obama as an imminent danger, many people do and certainly you understand how passionate some of them (some of us) can get about our freedoms, our liberty and our opposition to a government taking away either. In very many people’s eyes Obama (not alone but using his puppets in Congress) is attempting to do just that! I don’t know about bloodshed but you can expect some very violent reactions from many thousands of people.

Doris,

Bushanomics? Great phrase! I hope we never get back to someone like Bush! He was great on defense but a complete loser in the sphere of economics.

Thanks,I don’t see Obama as an iminent threat to our freedom.I do,however want Larry and others to continue to tell their thoughts and fears about him.I read and learn sometimes,from you guys opinions,as do others and am thinking more about what he and his are doing,so ,Larry don’t stop,just know we are gonna try to make our own kind of sense out of him,too.Please if Obama is voted out next time,don’t give us another Bush,I don’t know if our country will survive it.

Larry, like anyone else, you’re free to write anything you want about Obama or anything else. Some, including me, may disagree with you, but that’s the way the cookie crumbles (bet you haven’t heard that one in a long time!).

Doris, anyone that wants to expand government must do so at some cost, and ultimately, that cost is more freedom. That freedom may take the form of higher taxes, more regulations, or larger bureaucracies, all of which cost us more money, which in turn means we have to work longer into the year to pay whatever “debt” our “leaders” have decided that we owe for the year.

When somewhere around 35%-40% of the general adult population has decided that they are tired of having their freedoms eroded, we will have a true change away from republicrat politics as usual, a change towards more freedom.

Our “leaders,” nearly all of them, have the morals of an alley cat and all of the fiscal responsibility of drunken sailors on shore leave. Stop voting for “leaders,” for people who promise to do anything for you except to leave you alone. Start voting for people that will represent you.

Government cannot provide anyone with largesse, cannot take care of “the poor” without having first taken the money, at gunpoint, from someone else. No just society can be made by having its governors behaving arbitrarily towards anyone. You cannot promulgate injustice to promote justice, for justice is a balancing of the scales to provide recourse to someone that has been quantifiably injured.

To equate income redistribution with justice is a perversion, for it assumes that those that have money have unfairly gotten it from the poor, or have unfairly denied it to the poor, or “the gods” have unfairly smiled on them in some way.

Brian, many of your arguments in comments and articles about the proper relationship between citizens and government are appealing. However, I don’t understand what your alternatives might be. You don’t like taxation, limits on freedom, government controls, corrupt politicians, and deviations from the original meaning of the Constitution. I agree on every point.

However, it’s not clear what you would do, given human nature and modern political and social realities, to create a government and society that would be significantly different. Like you, I’ve seen life in many other countries, and I know a lot in detail about many more. I can’t think of an example of governance and social organization that’s better than the American example, warts and all.

An article, or a series, detailing alternatives would be nice, assuming that we start from where we are, not where we would like to be.

Thank-you,Brian for the explanation.I agree with the dream,but I,as Tom,don’t know how that kind of Gov. could work or no Gov.could work.Who will pay for all the public things we need?Who will pay for all the poor childrens food,care,housing and their worthless or disabled,or can’t find a job,parents food and care?I don’t think the rich and powerful,not most of them,will help voluntarily.They deserve to keep most of their money or all,but do we then live for ourselves,the foofy on the poor and disabled?The only reason most of the really well off contribute to charity is for the tax deduction,do we end that,along with taxes,so the poor and needy get no help?I truly don’t believe most people will give to help,without interference from big brother,as sad as that is.I do yearn for a better way so most folk can make their own way and most folk could police theirselves,but human nature is not so compassionate and I hate to see children go hungryI do like to drive my huge truck on a really well maintained road,too.I do not,however want to pay more taxes for these privileges..what’s your solution?I know you have one,but getting 40% of people to agree on anything is a hard thing to achieve.

Doris, as I have indicated in the past, especially in my essay on money and inflation, most of these programs are “needed” because of what the Federal Reserve, in conjunction with the federal government, has done to our money.

There was no shortage of poverty in the 19th century here, yet people managed to survive and be productive. Things are better today than they were 100 years ago not because of government, but in spite of it.

Tom, I know you’ve pointed to “benefits” like the GI Bill for the soldiers returning from WWII and other such things, but the unintended consequence of that bounty has been just like what we are seeing in health care: skyrocketing prices. My older sister graduated from med school in May of 1989. Back then, tuition at state medical schools was less than $8K annually (it was only about $2500 her freshman year). Today, it runs almost that (and in many cases, much more) for a semester of undergrad. Schools aren’t so much competing for students (though they are to an extent) as they are for an increased enrollment to increase their share of GSLs, Pell Grants, and federally funded research grants.

I cannot imagine entering college today for middle income parents with a 4 year education running near $100K. Are children (or their parents) going to have to start getting mortgages, paid in monthly installments for 30 years, to go to college? What is the benefit of that? In order to be able to service a school loan, a mortgage or rent, and even a modest car note, one would need a take-home of probably $4000/month at the bare minimum. That is going to require probably no less than $65K/yr gross. I don’t know too many recent college grades that can haul that in, even with degrees in the sciences and engineering (which are far and away the highest paying entry-level jobs).

Under free market conditions, the increased supply of a thing will ultimately lower the price on that thing. Government interferes with that natural process and artificially elevates the price on a thing that would otherwise be cheaper. The elevated price makes it appear, for all intents and purposes, that there is a shortage of that thing.

Another great example of this sort of interference is the rent-controlled apartment in NYC. For those that live in them, it is a great thing. But rent control has, in fact, created a shortage of apartments, thereby elevating the price on the ones that are not rent-controlled. Is the solution to control rent on more apartments, or is it to get the city government of NY to get out of controlling the free market for residences? Apartment buildings sit vacant all over NYC because their owners cannot rent them at a profit because of what the city government is doing.

For every short-term benefit you can cite, and their are loads of them that even I can recognize, I can point to a long-term, unintended, and negative one that is far more harmful than the initially realized gain.

As I have said repeatedly, government involvement in anything will always ultimately increase the price tag of that thing. The fact of a price tag changing may or may not be of any particular moment. What I mean by “increase the price tag” is simply that money is a medium of exchange, which exchange occurs principally because of labors provided. When government interferes in the market, it puts upward pressure on prices, generally causing laborers to labor longer than they did previously to obtain that thing.

I’ve used as an example of this in the past the price tag on a Colt 1911A1. The rough exchange rate between gold, the dollar, and steel hasn’t changed much in the last 90 years (a $20 gold double eagle will buy that pistol today just as it did in 1920, as will about $900 in Federal Reserve notes today, and a $20 gold double eagle can be had for about $900), but it in fact takes a bit longer for the average worker today to earn the money to buy that pistol than it did for the average worker in 1920.

This sort of thing comports well with what Maynard Keynes (and his lick-spittle FDR) believed was the roll of government in an economy, but it in fact falls very short of helping anyone except for those that control the supply of money, and those whose influence and power can be bought: legislators.

Tom, that’s where you and I part ways – none of this is theoretical. Does it not stand to reason that a less efficient thing is ultimately a more expensive thing, that capital removed from the market is capital that won’t be used where it is likely to be put to its most efficient use? Again, not theoretical. If it were not the case, we’d still be using whale blubber to keep our homes lighted and 95% of the country would still be involved directly in agriculture.

A couple of classic cases of government functionaries not having any grasp of the nature of the market (and even some businessmen) follow.

I don’t recall the man’s name, but it was said around 1900 that everything that could be invented already had been, and this from a fellow that worked in the patent office. There have been more patents issued probably in the last 25 years than there were between 1789 and 1985.

An IBM exec in the 40s didn’t see a use for any more than just a handful of computers like ENIAC in the whole country. That mentality is part of Big Blue’s culture, and is why upstarts like MS, Oracle Corp, Sun, and HP/Compaq crushed them. I seem to recall talk in the late 70s about IBM and their “monopoly” maybe needing to face Sherman Antitrust. That’s laughable today, but it is a pretty good measure of the way government works v the way the markets work. The bureaucrat sees things in his largely static world and assumes every place else is just like it. He cannot see the forest for the trees, doesn’t understand what drives people to innovate and produce (other than some vague and misinformed notion of avarice).

The post office has been doing things basically the same way since day one. Good thing they don’t have to compete on the open market, because Fred Smith would have either sent them packing or bought them out by now. Our economy depends upon gamblers like Fred Smith, not upon government functionaries that add no value to anything they do. (I actually stayed at his house a couple days when I was in high school – I wish I’d been more interested in business back then).

And to repeat, I am no anarchist. As Alexander Hamilton wrote in Federalist #51: “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”

Certainly are no angels in our government,don’t have to worry about that one.That’s what I was saying,men are not angels and so we need government,but who is watching government,not angels either.Foxes are watching the henhouse.

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